Banks Rake In N4.8trn Profit In 1 Year Despite Challenges

Despite rising inflation and other economic challenges, seven deposit money banks in the country nearly doubled their profits in 2024, as the Monetary Policy Committee affirmed that the industry remained strong and resilient.

According to the financials of Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), FBN Holdings, Ecobank Incorporated, Fidelity Bank and Stanbic IBTC, the seven banks reported a joint profit after tax of N4.793 trillion for the full year of 2024.

This is an 82 per cent increase on the N2.635 trillion it made in the full year of 2023. Zenith Bank reported the largest profit, with N1.032 trillion in 2024, a 52.7 per cent improvement over the N676.569 billion it made in 2023.

GTCO recorded a PAT of N1.017 trillion at the end of last year, an 88.6 percent improvement over the N539.654 billion it made in the full year of 2023.

Fidelity Bank had the highest percentage increase in its profit for the year.

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According to its audited reports released on the Nigerian Exchange, Fidelity Bank’s profit after tax was up by 179.6 per cent from N99.454 billion in 2023 to N278.106 billion in 2024.

Likewise, Ecobank posted a PAT of N735.897 billion, a 179.2 per cent improvement over the N263.524 billion it made in 2023.

United Bank for Africa also reported a profit after tax of N766.568 billion, compared to N607.696 billion in 2023, while Stanbic IBTC posted a profit after tax of N225.311 billion, compared to N140.617 billion in 2023.

FBN Holdings’ unaudited 2024 financials showed that the financial conglomerate made a profit after tax of N736.734 billion as against N308.433 billion, which it made in the comparable period of 2023.

The sources indicate that the Monetary Policy Committee (MPC) discussed the resilience of the Nigerian banking system during their February 2025 meeting. At the end, the members acknowledged the robustness and resilience of the Nigerian banking system despite economic challenges.

While highlighting the satisfactory prudential ratios and stress test results, the members, however, stressed the need for continued vigilance and surveillance by the CBN and close monitoring of the ongoing recapitalization of banks to ensure the injection of quality capital.

While key indicators like liquidity and NPLs appear positive, a slight decline in Capital Adequacy Ratio (CAR) was noted by some members, and one member pointed out that it remains below international standards. The increase in Cash Reserve Requirement (CRR) is also a factor influencing the banking system’s liquidity. Overall, the assessment is positive, but there is a clear call for continued monitoring and strengthening of the sector.

According to Bala Bello,  prudential ratios are within regulatory thresholds, and stress test results remained satisfactory despite the contractionary stance of monetary policy.

He also highlighted the ongoing recapitalisation of commercial banks as crucial for ensuring continued stability amidst evolving global and domestic economic conditions.

Badele Amoo, for his part, stated that the Nigerian Financial system continues to be resilient and strong as banking industry assets grew, industry credit and deposits increased, and bank liquidity remained adequate. However, he noted that the Capital Adequacy Ratio (CAR) declined slightly in January 2025. Non-performing loans (NPL) stood at 4.2 per cent in January 2025. Stress tests indicated banking industry resilience against various risks.

Mustapha Akinkunmi, on his part, pointed out that CAR rose in January 2025 compared to the previous year, reflecting positive movement in the capital strength of Nigerian banks. However, he noted that it remains below the regulatory threshold for many banks in advanced economies, suggesting room for further improvement and calling for additional action to accelerate the recapitalisation process.

He further noted that Non-Performing Loans (NPLs) ratio declined in January 2025.

He also pointed out the significant increase in the Cash Reserve Requirement (CRR) held by the CBN, reflecting efforts to manage inflation and control liquidity, which could lead to a contraction in credit.

He called for carefully balanced monetary policy decisions to maintain consumer confidence in the banking system.